What is a peril?

A peril is what your homeowners insurance policy calls the source of damage to your property. The earliest forms of property insurance only covered the most common peril: fire. In fact, many people still refer to basic property insurance as fire insurance and there are a number of old insurance companies whose names still contain the words “fire insurance company.” But these days, home insurance covers much more.

Fire, hail, wind, and explosions are some examples of the types of perils that insurance companies will commonly cover if they cause damage to your home and personal property. There are two basic types of home insurance policies: named perils and open perils. The named peril policy will only cover losses if they are caused by one of the perils named on the insurance policy. An open peril policy will cover all perils except those that are specifically excluded by name on the policy, so it’s typically much better to have an open peril policy because it covers many more causes of loss.

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